The company was facing increased competition, stricter regulation and lower revenues which led to an effort -in conjunction with Matrix – to improve labor productivity and revert the decline its performance. Opportunities to improve efficiency were identified which saved the equivalent to 5% of EBITDA.
Context
A retail company was seeing its performance impacted by increased competition and recent regulatory changes.
Increased competition had led revenue growth to slow compared to its rivals. Income was growing slower than costs and profit targets were consistently missed.
Detected opportunities
The company urgently needed to standardize labor productivity between clusters of branches over its three business formats without harming the standard of service or operational continuity.
To sustain efficiencies over time, tools were adopted to monitor internal productivity metrics and maintain adjusted staffing levels over time.
In addition, there were important opportunities to improve efficiency in line with industry benchmarks in the organization’s support areas (branch management and central office).
With a focus on the medium term, initiatives to improve processes and working practices were planned and habilitated with new and better tools in order to generate sustainable improvements in productivity.
Proposed actions
In line with operation leaders and corporative management, each area assumed commitments which were carried out through a structured process, comparing productivity drives with internal and industry benchmarks, seeking to understand the particularities of each area of the company.
In addition, based on a revision of processes in each branch (through field visits), an analysis model of labor productivity was built based on internal benchmarks.
Together with defining staffing changes, a detailed rollout plan was developed for each area of the business. A communication plan focused on key audiences at different levels of the organization was used to efficiently transmit the motive for the changes and future aspirations.
Impact
Annual savings were achieved of around US$11 million in the operation and of around US$8 million in the central office. This led to a 5% increase in the company’s consolidated EBITDA.
